Crypto rapper ‘Razzlekhan,’ husband reach plea deal over Bitfinex hack laundering

Jul 21, 2023
FILE PHOTO: Photo illustration of Bitfinex cryptocurrency exchange website

By Luc Cohen

NEW YORK (Reuters) -An American couple accused of laundering billions of dollars worth of cryptocurrency stolen from the 2016 hacking of virtual currency exchange Bitfinex have entered into a plea agreement, court records showed on Friday.

Heather Morgan, who used the hip-hop alias “Razzlekhan” to push her music online, and her husband Ilya Lichtenstein were initially arrested in February 2022. They are set to appear for a plea hearing on Aug. 3 before Senior Judge Colleen Kollar-Kotelly in Washington, court records showed.

Kollar-Kotelly ordered prosecutors and defense lawyers to file a copy of the plea agreement, which is not publicly available, by July 27.

A spokesperson for the U.S. Attorney’s office in Washington declined to comment. Lawyers for Lichtenstein and Morgan did not respond to requests for comment.

The couple had active public profiles. Morgan said on her website her rap pseudonym “Razzlekhan” referred to Genghis Khan “but with more pizzazz.” In her lyrics, she proclaimed herself a “bad ass money maker” and the “Crocodile of Wall Street.”

The pair stands accused of conspiring to launder more than 100,000 bitcoin stolen after a hacker attacked Bitfinex.

They each face one count of money laundering conspiracy, with Morgan facing an initial count of conspiracy to defraud the United States, an updated charging document filed on Thursday showed.

The bitcoin was worth $71 million at the time of the hack, but had appreciated to more than $4.5 billion at the time of their arrest. Prosecutors are now seeking to have the pair forfeit assets worth around $3 billion, according to the charging document and current spot prices of various cryptocurrencies.

In addition to cash from bank accounts and tokens from crypto wallets, prosecutors want Morgan and Lichtenstein to fork over gold coins “excavated and recovered by law enforcement” from an unspecified location in California.

(Reporting by Luc Cohen in New York; editing by Jonathan Oatis, Marguerita Choy and Richard Chang)